Fact Sheet on Tobin Taxes

(Feel free to print this and use it as a flyer...)

They are simple sales taxes on currency trades across borders. The original proposal came from James Tobin, Ph.D., a Nobel laureate economist at Yale, but economists have since refined his approach. Tobin Taxes can be enacted domestically by national legislatures, but will require multilateral cooperation to be effectively enforced... Political will for passage is the major obstacle to be overcome, by citizen mobilization...

The proposal is important due to its potential to prevent financial crises. Also, the estimated $100 - $300 billion per year makes it possible to meet urgent global priorities, such as preventing global warming, disease, and poverty. Help turn the tide towards global solutions in the 21st century...

How Tobin-style Taxes would work:

Currency speculators trade over $1.8 trillion dollars each day across borders. The market is huge, and volatile.

Each trade would be taxed at 0.1 to 0.25 percent of volume (about 10 to 25 cents per hundred dollars)

The currency market would thus shrink in volume, helping to restore national economic autonomy. Nations again could intervene effectively to protect their own currency from devaluation and financial crisis.

Billions in revenue, estimated at $100 - $300 billion per year, would be generated.

Revenue could go into earmarked trust funds to fund urgent international priorities.

Frequently Asked Questions...

Is there a need?

In the globalized economy, there is a lack of adequate funding for global problems such as disease, poverty and hunger. Global climate change, deforestation, population growth and unemployment, declining fisheries and pollution threaten local communities worldwide. Projects which could help to address these needs and create jobs will cost more than $400 billion annually. Private donors do not meet the need, and some nations cut their aid budgets. New multilateral approaches to public finance, such as Tobin Taxes, may provide part of the answer...

What would happen to the revenue?

It is essential that guidelines and priorities be set, to avoid "pork barrels" and corruption. Citizens could demand international criteria such as earmarking funds for poverty, disease, and the environment.

Are there groups supporting this approach?

Yes. From the World Council of Churches to the AFL-CIO, from Rainforest Action Network to Global Exchange, from Eurodad to War on Want, organizations large and small around the world are signing on. Is your group listed on our website yet?

What can I do to help?

These proposals can be passed by national legislatures around the world, and national governments will then participate in the international cooperation necessary to enact multilateral enforcement procedures. Citizens can mobilize to encourage their legislatures and governments to support this hopeful and life-saving proposal... Here are some concrete steps you can take:

Learn more by checking our websites and links. See www.tobintax.org for campaigners links.

Join an economic study group on globalization, and ask them to study and get speakers on Tobin Taxes.

Start a group to examine public budgets, and recommend urgent projects to address global warming and poverty.

Ask your local banks whether they invest in currency speculation with your money.

Start your own Tobin Tax chapter in your community, and work to pass local resolutions in your cities, and to convince your Congress members to support the DeFazio - Wellstone resolution, H.Con.Res.301.